News

Why is Consumer Confidence Plummeting?

by
Charlotte Freed
| Jan 04, 2019

Labor market expectations declined to unprecedented lows for the first time in 41 years, causing U.S. consumer confidence to sharply deflate. With the stock market fluctuating, expansion moderating, and global economics worsening – America’s consumers are showing signs of losing optimism, as the confidence index decreased eight points to a reading of 128.1 points. Consumer expectations also fell to 16.6 percent, the most notable drop since 1977.

Whether because of uncertainty around the ongoing trade wars or because of President Donald Trump continued attacks on the Federal Reserve, these numbers show a notable effect on the country’s stance on the economy. Additionally, interest rates continue to increase, the financial uptick from year-old tax cuts continue to decrease, and the housing market and manufacturing sector are cooling, prompting further unrest. Financial experts recommend paying close attention to consumer attitudes over the coming months to gauge how stock prices affect their standpoints and behaviors.

Still, while economic expectations fell, The Bloomberg Consumer Comfort Index shows that the weekly comfort measure recovered slightly from a three-month low. Consumer perceptions of the job market continue on a positive track, lending a positive side to the newest reports.